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Cash Out Refinance

If you took all of those debts and refinanced into a 30 year fixed mortgage at 3.5% the monthly payment would only be $1,242. A $2,000 savings is monumental. Part of the savings is due to lowering the overall interest rate and elongating the repayment term of your credit card and auto loan debt. For example a car loan is typically for seven years or less. When you combine that balance with other debts into a thirty year mortgage you are prolonging the amount of years you have to pay that debt back.

Consolidating debts through a cash out refinance is another way to give you control over your monthly budget and free up cash flow for additional expenses. For people that have a decline in income, unexpected medical bills, or simply want to have more play money this is an ideal solution.

Refinancing and consolidating your debts can also help you to pay off your home loan sooner. If the above borrower could continue paying $3,238 towards debts on a monthly basis they would be putting the additional $2,000 directly toward the principal balance of the loan every month. At this rate the loan could be paid off in full in slightly over 8 years! This is amazing for people that want to be debt free. It is not as hard as it sounds. You can easily be debt free with this plan if you stick to a monthly schedule of taking the entire savings and applying it toward principal. This still leaves borrowers with flexibility because if an unexpected bill comes up you can keep the savings that month. The refinance puts you in the drivers seat. Not consolidating your debt keeps you tied to payment plans and schedules set by creditors.

Refinance interest rates are low so contact a mortgage banker today to discuss your loan options. There are various refinance programs available to save you money. Whether it is consolidating debt or simply reducing your